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Preface
With growing public awareness about sanitation, and with increasing pressure on the
government and urban local bodies to manage waste more efficiently, the Indian solid waste
to energy sector is poised to grow at a rapid pace in the years to come, opening up
attractive investment opportunities. As the industry is relatively new in India, a better
understanding of these opportunities in the Indian waste to energy sector is essential for
investment decisions.
The objective of this white paper is to provide inputs on the potential and opportunities of
the Indian municipal solid waste to energy industry. The white paper has a special emphasis
on practical and actionable intelligence for Indian entrepreneurs and businesses.
This document has been prepared by Energy Alternatives India (EAI), a leading Indian
research and consulting firm with a focus on renewable energy and clean technology.
I hope you find this whitepaper useful in your efforts to venture into the Indian solid waste to
energy industry.
Narasimhan Santhanam
Cofounder and Director
Energy Alternatives India (EAI) www.eai.in
narsi@eai.in
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Contents
Preface ....................................................................................................................................... 1
Key Takeaways.......................................................................................................................... 7
1. Potential for Municipal Solid Waste to Energy ................................................................. 8
1.1 Introduction to Waste ................................................................................................................................ 8
1.2 Municipal Solid Waste (MSW) ................................................................................................................. 8
1.3 Municipal Solid Waste Generation and Management Scenario in India ................................ 9
1.4 Potential for MSW to Energy in India ................................................................................................... 9
1.5 Technological Routes for MSW to Energy ....................................................................................... 10
1.6 Prevalent Deficiencies in the MSW Management System in India ......................................... 13
1.7 Key Drivers Enhancing MSW Management and MSW to Energy ........................................... 14
1.8 Future Trends in MSW Generation, Management and Energy Recovery ............................ 15
2. What are the Opportunities in MSW to Energy for your Business? ..............................16
2.1 MSW Value Chain...................................................................................................................................... 16
2.2 Business Opportunities along the MSW Value Chain.................................................................. 17
2.3 Owning and Operating Solid Waste Management Facilities .................................................... 18
2.4 Strategic and Financial Benefits from Waste to Energy Business ........................................... 19
2.5 Potential Risks and Barriers in the MSW to Energy Business ................................................... 20
3. Is Waste to Energy the Right Opportunity for Your Business?......................................21
3.1 Companies that Could Benefit from the Waste to Energy Sector .......................................... 21
3.2 Key Success Factors and Competencies for Waste to Energy Business ............................... 22
3.3 Key Indian Players in the MSW to Energy Sector .......................................................................... 23
4. Summary .............................................................................................................................24
Waste to Energy Support from EAI ......................................................................................25
EAI Services for the Waste to Energy Sector .......................................................................26
Why EAI for Waste to Energy? ..............................................................................................27
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Key Takeaways
About 115000 tons of solid waste is generated per day in the country. This
figure could be twice as much by 2020.
Municipal solid waste is a potential source for recyclable and inert
materials and can produce value added products, in addition to energy
recovery.
Business opportunities in waste to energy exist in all three stages of waste
to energy Waste Transportation, Waste Management Facilities, and
Waste Processing for Energy Recovery.
Indian government actively encourages private sector participation in
MSW value chain through a variety of business and operational models.
Currently, biomethanation and incineration are the most prevalent and
mature technologies for MSW to energy in India. Gasification and
pyrolysis are the emerging technologies.
Inadequate segregation at source, sub-optimal regulations and incentives,
inadequate treatment facilities and immature technologies are some of
the key challenges in this sector.
Key success factors in waste to energy include optimal technology,
efficient operations, focus on costs, and emphasis on environmental
protection.
Some of the prominent companies working in the Indian waste to energy
sector include: Ramky Enviro Engineers, A2Z, Hanjer Biotech Energies and
SELCO International.
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Industrial
Waste
Solid,
Biomass
Waste
Medical
Waste
Waste generated at health care facilities, such as hospitals, blood banks as well
semi-solid,
liquid,
or
gaseous
or
residual
materials (excluding
Organics
Kitchen
waste
Agro-waste
Vegetable
waste
Garden
waste
Recyclables
Plastic
Paper
Syringes
Inerts
Sand
Pebbles
Gravels
Tablets
Tin can
Inerts
22%
Others
8%
Recyclables
20%
Biodegr
adable
50%
Metals
Glass
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State/
Union Territory
Recovery Potential
(MW)
State/
Union Territory
Recovery Potential
(MW)
Andhra Pradesh
107.0
Maharashtra
250.0
Assam
6.0
Manipur
1.5
Bihar
67.0
Meghalaya
1.5
Chandigarh
5.0
Mizoram
1.0
Chhattisgarh
22.0
Orissa
19.0
Delhi
111.0
Pondicherry
2.0
Gujarat
98.0
Punjab
39.0
Haryana
18.0
Rajasthan
53.0
Himachal Pradesh
1.0
Tamil Nadu
137.0
Jharkhand
8.0
Tripura
1.0
Karnataka
125.0
Uttar Pradesh
154.0
Kerala
32.0
Uttaranchal
4.0
Madhya Pradesh
68.0
West Bengal
126.0
Source: TERI and MNRE
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MNRE estimates that the energy recovery potential from MSW could go up to 5200 MW
by 2017. Of the existing potential, only about 24 MW has been exploited, which is less
than 1.5% of the total potential.
Andhra Pradesh, West Bengal, Tamil Nadu, Maharashtra, Karnataka and Uttar Pradesh
with heavy urban population and industrialized economy generate increased loads of
MSW and have significant power recovery potential - over 100 MW each.
Delhi, owing to its high population density, has an energy potential nearly equivalent to
that of Andhra Pradesh
Gujarat, being industrially advanced, holds significant promise for energy generation
from urban wastes.
Punjab, Haryana, Kerala, Orissa and Jharkhand exhibit only moderate potential for energy
from MSW in spite of relatively dense population.
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Recyclables
Organics (Hydro-carbon
materials)
Broken glasscontainers,
bottles, cups etc
Landfill
Anaerobic Digestion
Ceramics, concrete
aggregates, recycled
glass countertops
Gasification
Pyrolysis
Incineration/Combustion
Digestate
Fertilizer
Producer Gas
Biogas
(Methane)
Fermentation
Organic
compounds
(methanol,
acetic acid
etc)
Ethanol
Syngas
FT Process
Syn-diesel &
Gasoline
Bio-oil
Pyrolytic gas
Ash
Biochar
Chemical
feedstock
(flavors,
adhesives etc)
Construction
material
mix
Electricity
Transport Fuel
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Heat/Cold Applications
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Gasification
Pyrolysis
Incineration
Biomethanation
Method
Thermochemical
Thermochemical
Thermal
Biochemical
End-Products
Producer gas
Syngas, Biochar
Partial oxidative
Conversion
Biooil, Biochar,
Pyrolytic gas
Reductive
transformation
Heat , Ash
Methane, Compost
Dry wastes of
synthetic and
biological origin
500-1300
Dry wastes of
synthetic and
biological origin
380-530
Complete
oxidative
conversion
Dry wastes of
synthetic and
biological origin
700-1400
Anoxygenic
microbial
transformation
Fluid rich
biodegradable
wastes.
35-70
High
High
Medium-high
Medium-High
Emerging
High Potential
70-80
Non-catalytic
Concerns with toxic
gases, organic
compounds
emissions and char
generation.
Not proven
Moderate
70-80
Non-catalytic
Constraints remain
as tar depositions,
char and volatile
organics emissions.
Most prominent
High Potential
50-70
Catalytic
Probability for
liberation of
irresistible, pungent
odor from wastes.
Feedstock
Preprocessing
Method
Shredding and
drying
Drying
Prominent
Moderate
50-60
Non-catalytic
Ash discharges
and evolution of
toxic gases from
partial
combustion as
limitations.
Drying and
pelletization
Permitted
moisture
content of feedstock
<15%
<15%
25-30%
50-60%
Syngas fermentation
and Fischer-Tropsch
reduction of syngas
Hydro-treating and
hydro-processing of
bio-oil to high value
organic derivatives
Mass burn,
Modular and RDF
incineration
systems
NA
Process principle
Feedstock
Requirements
Temperature
Requirements (C)
Cost (Capital &
O&M)
Prominence in India
Future Potential
Efficiency (%)
Role for catalysts
Environmental issues
Sub-types of process
Scope for
downstream
processing
Application of fuel
products
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Sedimentation of
organic sludge
Catalytic
decomposition of
methane to yield
syngas
Fuel for heat,
electricity, transport
fuel, syn gas
generation
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Legal
Technological
the
ability
Environmental
of The increasing awareness and
among
public
and
city levels are becoming is still limited, development of government for protection of
stringent than ever before. new
and
more
The consequent threat of technologies will act as a key drivers for MSWM.
penalties could act as an driver to shape the progress of
important driver for MSW MSW management industry.
management (MSWM)
Socio Economic
Developmental and
Competitive
Incentives
number
of
current
and
society get affected most by provide a clean city with good emerging incentives CDM or
the harmful consequences municipal
in
Indian
large
cities
populations
level,
health
problems
incentives
such
as
tax
trauma
encountered.
poverty
societal
order
technology
investment is strong.
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Future
MSW Generation
Amount of MSW 55 million tonnes / Year
Generated in India
Waste Composition
MSW Management
MSW to Energy
Energy
Potential
Recovery
1500 MW
Energy
Recovery Biomethanation
Options from MSW
incineration of RDF Pellets
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5200 MW by 2017
and Plasma arc gasification and ash
melting
technology,
thermal
decomposition technology for
dioxins.
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Collection and
Transportation
Transfer
station
Waste
Transportation
Recyclable
Materials
Separated
Disposal to
Landfills
Processing
for Energy
Recovery
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Business Opportunities
Primary collection and Collection of reusable plastics and metals etc for sale in local
segregation of inerts,
market.
dry
organics
and Waste Processing and sell RDF pellets to biomass power
others.
plants.
Mobilizing construction debris to make tiles and bricks
Separation
of
wet Production and sale compost to bio fertilizer firms.
organic wastes
Biogas based power generation from sludge for selling it to
the grid.
Secondary
collection Maintenance of transfer stations
and storage
High throughput screening of materials for recycling, energy
recovery and land fill disposals.
Recycling of wastes
Recyclable commodity transactions from transfer stations
Sale of recycled plastic or metal granules
Conversion of processed wastes to industrial commodities
Transportation
and Transporting solid waste from the source to the landfill or to
logistics
the processing centers for energy recovery.
Revenues from automobile manufacturing and sales to
corporate bodies and contract holders etc
MSW
to
energy Production of machineries and equipments for energy
recovery
recovery technologies
Decentralized technology installations.
Power generation and sale of power
Production and sale of processed organic feed stocks from
MSW
Income from Certified Emission Reductions(CERs)
Management of wastes Design and construction of secured landfills
at dumpsite
Urban landscape development at abandoned landfills
Organization/financing Debt and equity financing
for service and value
chain enterprises
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Business Model
MC/Service
3-8
contract/BOOT*
20
BOOT/DBFOT/BOO*
20-35
MC/DBFOT*
3-20
Mostly on BOOT
and transportation
Waste processing facility to
derive energy
Development of sanitary
landfills and post closure
maintenance
Integrated MSW Management
*BOOT Build Own Operate Transfer; BOO- Build Own Operate; DBFOT- Design Build Finance Operate Transfer; MCManagement Contract; MRTS- Mechanized Refuse Transfer Station
The general PPP contract structure for an MSW to energy processing facility operating on BOT
model is illustrated below
Nominal lease rentals
Municipality
/ULB/
State
(SEB)
sale of power
Agency
Contractor
for
waste
processing
Source: http://www.urbanindia.nic.in/programme/uwss/Term_Sheet_Processing.pdf
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Lack of initiatives from key stakeholders While the roles of the various stakeholders ULBs,
pollution control boards etc are clear on paper, there is lack of proactive measures and
initiatives from many of these stakeholders. This is a bottleneck for MSW projects that depend
so much on governmental approvals for many aspects.
Environmental & legal Some MSW to energy plants in India, as well as worldwide, have been
the subject of litigation from environmentalists, society activists and NIMBY neighborhood
residents. This has been especially true for incineration-based projects, which are still the
dominant technology for MSW-based power plants.
Financial Barriers
Most solid waste to energy projects are capital intensive. Raising significant capital for an
emerging sector is often difficult.
Poor financial standing of the state utilities along, with lack of proper policy back up from the
government has resulted in uncertainties over timely revenues from sale of power. Debt
instruments dont usually work when the revenue stream is unattractive.
Availability of waste at zero or near-zero cost which is a vital part of the revenue model, but
this is not achievable on a consistent basis
Waste to energy projects are considered as an unsafe investment by some due to lack of short
term returns
Technological Barriers
Some of the emerging technology options large scale gasification for instance - are yet to be
proven on a commercial scale.
The characteristics of waste vary with region, source and scale, resulting in uncertainties over
optimal designs and processes.
Lack of indigenously developed technology and skilled manpower for emerging process routes
such as gasification and pyrolysis.
Other Barriers
Long lead time for completing all the formalities/ documentation and getting all the approvals.
Lack of expertise to understand, develop, appraise and put in place a structured and viable
business model for these projects.
Shifting priorities of the urban local bodies from waste-to-energy to other issues resulting in
diversion of funds and other support.
Lack of clarity for investors in the roles and responsibilities of Urban Local Bodies (ULBs)
(Public Health and Engineering Departments (PHEDs), Boards, Municipalities, etc).
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Recycling companies
Rag pickers
Other informal sector participants
Farmers
Fertilizer companies, Agro-market enterprises
Other informal sector participants
EPCs
Locomotive manufacturing companies (Heavy and Light)
Private vehicle service stations, Transport agencies
Part time workers under contract
EPCs
Construction companies
MSW junk shop owners
Logistic services
Recycling of wastes
EPCs
Material Recovery Facility (MRF) operators
Intermediate material processing cottage units
Environmental engineering companies
Small and medium junk shop owners
EPCs
Civil infrastructure developers
Management of wastes at
landfills
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3.2 Key Success Factors and Competencies for Waste to Energy Business
Optimal technology The most appropriate technology depends on multiple aspects such
as amount of waste generated, degree of segregation and ultimate end product. It is critical
for the users of technology to consider all these aspects intensively before investing in a
specific technology.
Efficiency in every aspect of logistics and transportation Even in developed countries,
significant efficiencies can be incorporated into the logistics/transportation stage of the
waste management value chain. In developing countries such as India, the scope for
improvement in efficiencies is significant, and such improvements could have a significant
impact on the financial sustainability of the entire project
Ensuring benefits for all the stakeholders In India, waste management has diverse
stakeholders, some of them in the informal sector. Rag pickers represent one prominent
category in this context; another is the society in the vicinity of dump yards, landfills or waste
to energy power plants. Unless the business model is so structured as to provide benefits to
all the stakeholders, a number of operational and legal problems could arise.
Ensuring reliable supply of feedstock at low or no cost It is critical for the waste to
energy project developer to ensure that the generator of the waste or the municipal
corporation provides the waste at no cost, and in addition provides a tipping fee. The
processes for treatment of waste and subsequent energy generation are costly, and these
costs need to be offset through zero cost feedstock and availability of additional
monetizations such as tipping fees.
Emphasis on environmentally sound practices along the entire operational value chain
Some incineration-based waste to energy plants in India as well as worldwide have faced
significant opposition from environmental regulators and civil society, owing to allegations
of pollutants being released to the environment. Such social and legal concerns could
severely affect the sustainability of waste to energy power plants. Power project owners need
to undertake extensive analysis of all the aspects along the value chain that could have
adverse environmental impacts, and devise suitable remediation plants.
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Headquarters
Highlights
Biomethanation
Chennai
Follows Biogas induced mixing arrangement(BIMA) technology for a 5.1 MW MSW to energy
project
Bhopal
Mumbai
SELCO International
Limited
Hyderabad
New Delhi
Zanders Engineers
Limited
UPL Environmental
Engineers Pvt Ltd
Gasification
Mohali
Has a collaborative gasification technology to
process multiple feedstocks including MSW for
power
Vadodara
Advanced
gasification
technology
with
destruction efficiency of 99.9% and emissions well
below thresholds.
*The above companies could in future be using multiple technologies and process routes
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4. Summary
The business of generating energy from solid waste (especially municipal solid waste from
urban areas) is entering a period of rapid growth in India. The dual pressing needs of waste
management and reliable renewable energy source are creating attractive opportunities for
investors and project developers. Early movers who have identified the right technologies are
poised to grow in this promising industry.
At the same time, significant barriers exist. The yet to be commercialized technologies, high
capital requirements, predominant dependence on government machineries for many parts
of the business value chain and a sub-optimal regulatory environment present significant
industry challenges. These challenges have resulted in many critical questions regarding
waste to energy/value project viability remaining unanswered.
The complexity of navigating through these challenges calls for a clear understanding of the
stakeholders and their roles, business models, and technologies behind the waste-to-energy
solutions. Given the need for critical knowledge on the viability of waste to energy projects
before venturing into this niche sector, assistance from an advisory and research firm is
imperative.
EAI has been researching the waste to energy sector in India for the past few years, and we
have developed an exhaustive understanding of the various technology options for waste to
energy. We have worked with prestigious clients such as Bill & Melinda Gates Foundation
and Pepsi Co. for waste to energy projects, and can offer actionable market intelligence and
support for those keen on exploring this sector.
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Our team has excellent exposure to energy recovery using the following types of processes:
Clients
EAI consulting team has been assisting several organizations in diverse renewable energy
domains. The fact that a major percentage of our business comes from client referrals bears
ample testimony to the quality of our research and consulting.
EAI has undertaken Waste to Energy research projects for many clients including global
clients such as Pepsico and Bill and Melinda Gates Foundation.
Some of our other esteemed consulting clients include
Reliance Industries
Vedanta Resources
World Bank
Minda Group
iPLON GmbH
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Market Intelligence
Techno Commercial
Feasibility Consulting
different process or
technology routes
to attract sources of
finance.
Identification of
differentiated waste to
technology or process
implementation
energy business
Development of
stakeholders
techno economic
valuations to assess the
viability of different waste
Investment structuring
and financing support
to energy technologies
energy projects
Development of
projects
Intelligence on current
incumbents and
increase the
attractiveness of waste
to energy projects
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